C&C to invest €25m in cider

IRISH drinks and snacks company C&C Group is to invest a total of €25 million at its Clonmel base to boost cider production.

It has brought forward plans by one year due to the success of its Magners cider in Britain, where it has already achieved a 1% market share. In Ireland, Magners is known as Bulmers.

Its continuing popularity in Ireland North and South and its growing impact on the British market has forced the group to increase cider production.

The company said: “The planned expansion is one year ahead of the time frame originally envisaged and reflects the continued growth of C&C’s cider division.”

C&C, whose shares have more than doubled since listing last May, said the new manufacturing capacity will be added in 2006.

Analysts have been bullish about the group with Liam Igoe of Goodbody pointing out a move from 1% to 2% of the British beer market would add 40% to earnings.

Mr Igoe believes the shares are well valued, but still have some potential.

Head of research at Bloxham Stockbrokers, Kevin McConnell, says the group has to prove its worth in Britain. He says the shares are fully valued.

His concern is that archrivals in Britain such as Scottish & Newcastle, owners of Strongbow, have far deeper pockets to counteract the onslaught from C&C’s Magners cider.

C&C said in August it expected a moderate rise in earnings this year after turnover at its cider division grew more than 25% in the six months to the end of August.

The group has been credited with reinventing the drink by successfully marketing it to a new, younger generation of drinkers.

C&C made its announcement during a site visit by financial analysts to Clonmel where it employs 300 people.

New jobs may result from the project depending on how successful its venture in the British cider market becomes. But analysts are not anticipating too many new jobs flowing from the capital investment.

The group is not commenting because it is in a closed trading period.

Shares hit a new high yesterday rising 8cent to €5.03 on the day.

The group controls some key brands including Bulmers, 7Up, Tullamore Dew, Tayto and Ballygowan.